Chapter 18

Operations Management: Processes and Supply Chains, 10e (Krajewski et al.)Chapter 16 Resource Planning

1) An ERP system revolves around a single comprehensive database that is made available across the entire organization.Answer: TRUEReference: Enterprise Resource PlanningDifficulty: EasyKeywords: enterprise resource planning, ERPLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

2) Companies that fully customize their ERP implementation reap the greatest rewards from such systems since they can continue to use the same processes to which all employees are accustomed.Answer: FALSEReference: Enterprise Resource PlanningDifficulty: ModerateKeywords: enterprise resource planning, ERP implementationLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

3) A firm's existing, older information system is called a "legacy system."Answer: TRUEReference: Enterprise Resource PlanningDifficulty: ModerateKeywords: enterprise resource planning, legacy system

4) Material requirements planning (MRP) is a computerized information system developed specifically to aid in managing dependent demand inventory and scheduling replenishment orders.Answer: TRUEReference: Material Requirements PlanningDifficulty: EasyKeywords: material requirements planning, MRP

5) A materials requirements planning (MRP) explosion occurs when the system is bombarded with too many orders to schedule at one time.Answer: FALSEReference: Material Requirements PlanningDifficulty: EasyKeywords: material requirements planning, MRP explosion

6) A parent is any item manufactured from one or more components.Answer: TRUEReference: Material Requirements PlanningDifficulty: EasyKeywords: parent, component

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7) Dependent demand for an item occurs because the quantity required for it varies with the production plans of one or more parents.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: dependent demand, parent

8) A component is an item that may go through one or more operations to be transformed into or become part of one or more parents.Answer: TRUEReference: Material Requirements PlanningDifficulty: EasyKeywords: component, parent, transform

9) If the demand for an independent demand item is continuous and uniform, so will the planned order releases of its components.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: dependent demand, continuous

10) A bill of materials is a record of all the components of an item, the parent-component relationships, and the usage quantities derived from engineering and process designs.Answer: TRUEReference: Material Requirements PlanningDifficulty: Moderate

11) An end item in a BOM is typically both a component and a parent.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: BOM, bill of material, en item

12) Part commonality refers to the degree to which a component has more than one immediate parent.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: part commonality, component, parent

13) Part commonality tends to increase inventory costs.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: part commonality, inventory


14) Gross requirements are the total demand derived from all parent production plans.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: gross requirements, demand, parent

15) A bill of materials (BOM) shows all of the components of an item, the parent—component relationships, usage quantities, and lot size derived from engineering and process designs.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: BOM, bill of materials, parent, component

16) An intermediate item must have at least one parent and at least one component.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: intermediate item, parent, component

17) The master production schedule (MPS) is the part of the material requirements planning that specifies when components must be ordered or assembled.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: master production schedule, MPS, material requirements plan

18) Available-to-promise inventory is the amount of end items that marketing can promise to customers by a certain date.Answer: TRUEReference: Material Requirements PlanningDifficulty: EasyKeywords: ATP, available to promise inventory, MPS, master production schedule

19) The portion of the master production schedule farthest into the future is often frozen to reduce forecasting requirements.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS, master production schedule, freezing

20) The projected on-hand inventory in the MPS takes into account scheduled receipts, but not planned receipts.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS, master production schedule, freezing


21) The projected on-hand inventory in the MPS takes into account customer orders (booked) as well as the MPS quantities.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS, master production schedule, projected on-hand inventory

22) Gross requirements are the total demand derived from all parent production plans.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: gross requirements

23) Available-to-promise (ATP) quantities are only shown in the first period (if the projected on-hand inventory is greater than zero in the first period), and subsequently in periods when the MPS quantity is greater than 0.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: Available-to-promise quantities, ATP, MPS quantity

24) Planned receipts are estimates of the amount of inventory available each week after gross requirements have been satisfied.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned receipts, projected on-hand inventory

25) A planned order release indicates when an order for a specified quantity of an item should be issued.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned order release

26) For items manufactured in-house, one component of the planned lead time is waiting time.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned lead time, waiting time

27) The periodic order quantity (POQ) rule tends to keep more inventory on hand than the lot-for-lot rule, but less inventory on hand than the fixed order quantity rule.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: periodic order quantity rule, fixed order quantity rule, lot for lot rule, POQ, FOQ, L4L


28) Lot-for-lot (L4L) is a rule that maintains the same order quantity each time an order is issued.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: lot-for-lot rule, L4L, order quantity

29) MRP II ties MRP to the company's financial system.Answer: TRUEReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, MRP II, material requirements planning

30) The process with the least capacity is called a capacity constrained resource if its output is less than market demand.Answer: FALSEReference: Material Requirements PlanningDifficulty: ModerateKeywords: DBR, drum, buffer, rope, CCR, capacity constrained resource

31) The bill of resources (BOR) is a record of parent-component relationships and all the required materials, equipment time, staff, and other resources needed, including the usage quantities.Answer: TRUEReference: Resource Planning for Service ProvidersDifficulty: ModerateKeywords: BOR, bill of resources

32) A companywide process that cuts across traditional functional areas, business units, geographic regions, and product lines is a(n):A) enterprise process.B) master production scheduling process.C) kinetic process.D) full-business process.Answer: AReference: Enterprise Resource PlanningDifficulty: EasyKeywords: enterprise processLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

33) Entering new information in the database of an ERP system is a(n):A) data packet.B) transaction.C) record.D) file.Answer: BReference: Enterprise Resource PlanningDifficulty: EasyKeywords: enterprise resource planning, transaction, ERPLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

34) A front-office module for an ERP system includes:A) manufacturing.B) accounting and finance.


C) sales and marketing.D) human resources.Answer: CReference: Enterprise Resource PlanningDifficulty: EasyKeywords: enterprise resource planning, ERP, front officeLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

35) Which of the following is a back-office module in a typical ERP system?A) customer serviceB) salesC) marketingD) human resourcesAnswer: DReference: Enterprise Resource PlanningDifficulty: EasyKeywords: enterprise resource planning, ERP, back officeLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

36) Which of the following statements about ERP systems is best?A) Recent studies have shown that the most successful ERP implementations use standardized systems.B) ERP systems written in XML require complete replacements of a company's legacy systems.C) A company must adapt their ERP system to their existing processes in order for all employees to gain a benefit from the new system.D) An ERP system requires a regular synchronization of all of the module databases, which is usually accomplished automatically when the business is not conducting business.Answer: AReference: Enterprise Resource PlanningDifficulty: ModerateKeywords: enterprise resource planning, ERPLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

37) Which of the following is NOT an example of dependent demand items?A) shoelaces, shoesB) wheels, carC) carafes, coffeemakersD) ice skates, roller skatesAnswer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: dependent demand


38) Any item manufactured from one or more components is a(n):A) parent.B) component.C) intermediate item.D) purchased item.Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: parent, component

39) Which best defines the gross requirements for a component item?A) the forecasted customer demand for the componentB) the amount of safety stock needed to buffer against uncertaintiesC) the sum of gross requirements for all parents of the componentD) the total demand for the component derived from all immediate parentsAnswer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: component, parent

40) MRP can be used to best advantage under which one of the following circumstances?A) when the item's demand depends only on customer demandB) when the item's demand is uniformC) when the item's demand is constantD) when the item's demand depends on the production plans of its parent(s).Answer: DReference: Material Requirements PlanningDifficulty: ModerateLearning Outcome: Apply the process of materials requirements planning (MRP)

41) Which of the following statements about MRP is TRUE?A) To be classified as a successful MRP user, a company must use either the L4L or POQ rules for lot sizing.B) MRP gross requirements for a parent item are equal to the planned order releases of its components.C) MRP logic is based on the logic of uniform, continuous demand, and item independence.D) MRP gross requirements for a component depend on the planned order releases of its immediate parents.Answer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, componentLearning Outcome: Apply the process of materials requirements planning (MRP)


42) Which one of the following is an input to the MRP system?A) shop-floor schedulesB) financial reportsC) master production scheduleD) purchasing ordersAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, inputLearning Outcome: Apply the process of materials requirements planning (MRP)

43) If a planned receipt for an item is due in week 6 and the item's lead time is two weeks, in which week will the corresponding planned order release occur?A) week 2B) week 4C) week 6D) week 8Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned order receipt, planned order release

44) Which one of the following statements about lot-sizing rules is TRUE?A) The periodic order quantity (POQ) rule seeks to create inventory remnants.B) If the POQ rule is used, an item's lot size can vary each time an order is placed.C) The lot-for-lot (L4L) rule is a special case of the fixed-order quantity (FOQ) rule.D) All lot-sizing rules seek to minimize inventory levels.Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: lot, sizing, POQ, periodic order quantity

45) Which one of the following is an MRP lot-sizing rule that attempts to minimize the amount of average inventory?A) periodic order quantity (POQ), with P = 2B) fixed order quantity (FOQ)C) economic order quantity (EOQ)D) lot for lot (L4L)Answer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, L4LLearning Outcome: Apply the process of materials requirements planning (MRP)


46) Which statement on MRP explosion is best?A) It calculates the total number of subassemblies, components, and raw materials needed for each parent item.B) It calculates the total number of raw materials to be purchased from all suppliers.C) It calculates the total number of parts to be produced for each parent item.D) It calculates the total number of parts needed to be produced less the number of parts on hand for each parent item.Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, explosionLearning Outcome: Apply the process of materials requirements planning (MRP)

47) Which of the following statements concerning MRP is TRUE?A) Dependent-demand items tend to experience relatively constant demand rates.B) MRP systems use independent demands for each component item.C) Capacity requirements planning (CRP) uses open orders (scheduled receipts) and planned order releases to estimate capacity requirements for critical workstations.D) The most accurate way to forecast dependent demand is to examine past usage rates.Answer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, CRP, capacity requirements planningLearning Outcome: Apply the process of materials requirements planning (MRP)

48) Which one of the following is a feature of MRP II, but not available in basic MRP systems?A) financial projectionsB) action noticesC) dispatch listsD) capacity reportingAnswer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, MRP II

49) Which of the following statements about MRP II is best?A) It is computationally faster than regular MRP.B) It is limited only to aiding order-launching decisions.C) It incorporates informal systems through the use of expert systems technology.D) It provides more extensive information than MRP because it is tied to the company's financial system.Answer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP II, manufacturing resource planning


Table 16.1

50) Use the information in partially completed Table 16.1. What is the projected on-hand inventory in week 6?A) 0 unitsB) 15 unitsC) 33 unitsD) 53 unitsAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS start, projected on-hand inventoryAACSB: Analytic skills

51) Use the information in partially completed Table 16.1. In which week does the second nonzero MPS quantity occur?A) week 1B) week 2 or 3C) week 4 or 5D) week 6, 7, or 8Answer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS start, MPS quantityAACSB: Analytic skills

52) Use the information in partially completed Table 16.1. What is the MPS start quantity in week 4?A) 0 unitsB) 20 unitsC) 30 unitsD) 60 unitsAnswer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS start quantityAACSB: Analytic skills

53) Use the information in partially completed Table 16.1. What is the available-to-promise (ATP) inventory in week 1?A) 0 unitsB) 10 unitsC) 15 units


D) 55 unitsAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS start quantity, available-to-promise inventoryAACSB: Analytic skills

54) Use the information in partially completed Table 16.1. What is the available-to-promise (ATP) inventory in week 7?A) 0 unitsB) 33 unitsC) 40 unitsD) 60 unitsAnswer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS start quantity, available-to-promise inventory, ATPAACSB: Analytic skills

Table 16.2

55) Use the information in partially completed Table 16.2. What is the projected on-hand inventory in week 5?A) 0 unitsB) 35 unitsC) 40 unitsD) 75 unitsAnswer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: projected on-hand inventory, MPSAACSB: Analytic skills

56) Use the information in partially completed Table 16.2. In which week does the second nonzero MPS quantity occur?A) week 1 or 2B) week 3 or 4C) week 5 or 6D) week 7 or 8Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS quantity. MPSAACSB: Analytic skills


57) Use the information in partially completed Table 16.2. What is the MPS start quantity in week 1?A) 0 unitsB) 20 unitsC) 40 unitsD) 80 unitsAnswer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS start quantityAACSB: Analytic skills

58) Use the information in partially completed Table 16.2. What is the available-to-promise (ATP) inventory in week 1?A) 0 unitsB) 40 unitsC) 45 unitsD) 50 unitsAnswer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: available-to-promise (ATP) inventory, MPSAACSB: Analytic skills

59) Use the information in partially completed Table 16.2. What is the available-to-promise (ATP) inventory in week 6?A) 0 unitsB) 35 unitsC) 45 unitsD) 80 unitsAnswer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: available-to-promise (ATP) inventory, MPSAACSB: Analytic skills


60) Use the following partially completed MRP record to answer the question.

What are the quantities of planned order releases for item ABC for the first five weeks (weeks 1, 2, 3, 4, and 5)?A) 30, 0, 60, 0, 145B) 60, 0, 145, 0, 0C) 0, 30, 60, 0, 0D) 30, 0, 60, 145, 0Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills



What are the quantities of planned order releases for item XYZ for the first six weeks (weeks 1, 2, 3, 4, 5, and 6)?A) 20, 30, 0, 40, 20, 0B) 35, 0, 60, 0, 0, 0C) 5, 30, 0, 40, 20, 0D) 35, 0, 0, 40, 20, 0Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills



What is the planned order release quantity in week 4?A) 0 unitsB) greater than 0 units but fewer than or equal to 50 unitsC) greater than 50 units but fewer than or equal to 100 unitsD) greater than 100 unitsAnswer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


Table 16.3

63) Use the information in partially completed Table 16.3. In which week will the second planned order release occur?A) week 1B) week 2C) week 3D) week 4, 5, 6, 7, or 8Answer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

64) Use the information in Table 16.3. What is the planned order release in week 1?A) 40 unitsB) 180 unitsC) 220 unitsD) 240 unitsAnswer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


65) Use the following MRP record to answer the question.

What will be the projected on-hand inventory quantity in week 7?A) fewer than or equal to 30 unitsB) greater than 30 units but fewer than or equal to 60 unitsC) greater than 60 units but fewer than or equal to 90 unitsD) greater than 90 unitsAnswer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: projected on-hand inventoryLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills



What are the quantity and the week of the first planned order release?A) 150 units; week 1B) 150 units; week 2C) 240 units; week 1D) 240 units: week 2Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills



Which one of the following statements about item QRS is TRUE?A) The first planned order release occurs in week 1.B) The first planned receipt occurs in week 1.C) The second planned order release quantity is 90 units.D) The total planned order release quantity (summing up all eight weeks) is 190 units.Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


Table 16.4Consider the following MPS, BOM, and inventory data. Blank MRP records are provided at the end of this exam.Master Production Schedule: The following table shows the MPS start quantities.

Bill of Material-End item A uses 1 each of component C and 1 each of subassembly D.-Subassembly D uses 2 each of component E and 2 each of component F.-End item B uses 1 each of component C and 2 each of component F.

Selected Inventory Data

68) Use the information in Table 16.4. Which one of the following statements about item C is BEST?A) The 100-unit scheduled receipt of 200 units in week 1 can be delayed until week 2 without delaying item D's first planned order release.B) Its second planned order release is for 200 units in week 6.C) It has a planned receipt of 180 units in week 5.D) An order for 60 units should be placed now (in week 1).Answer: AReference: Material Requirements PlanningDifficulty: HardKeywords: planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


69) Use the information in Table 16.4. Which one of the following statements on item C is TRUE?A) It has a scheduled receipt of 50 units in week 1.B) Its gross requirement in week 6 is 100 units.C) Its projected on-hand inventory is 0 units for week 1 through week 6.D) Its first planned order release is for 100 units in week 4.Answer: CReference: Material Requirements PlanningDifficulty: HardKeywords: scheduled receipt, gross requirement, projected on-hand inventoryLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

70) Use the information in Table 16.4. Which one of the following statements about item F is BEST?A) The gross requirement in week 4 is 400 units.B) Its first planned receipt is for 120 units in week 4.C) Its 100-unit scheduled receipt in week 1 could be delayed to week 2 without delaying the planned order release for product B.D) Its first planned order receipt is for 385 units in week 4.Answer: CReference: Material Requirements PlanningDifficulty: HardKeywords: gross requirement, planned receipt, planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

71) Use the information in Table 16.4. Which one of the following statements about item E is TRUE?A) There are no planned order releases in weeks 1 though week 6.B) There is a planned receipt of 250 units in week 2.C) There is one planned receipt for the next 6 weeks.D) There is a planned order release of 250 units in week 3.Answer: AReference: Material Requirements PlanningDifficulty: HardKeywords: planned order release, action noticeLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


Table 16.5

72) Use the information in Table 16.5. Which one of the statements concerning item RST is TRUE?A) The first planned receipt occurs in week 5.B) The planned order release in week 2 is for 100 units.C) The planned receipt in week 7 is 80 units.D) There are exactly two planned order releases needed for the first 8 weeks.Answer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned receipt, planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

73) Use the information in Table 16.5. Which of the statements concerning item RST is TRUE? (Examine each answer independently.)A) If the safety stock level were 30 units instead of 0 units, the planned receipt in week 7 would be 110 units.B) If the scheduled receipt in week 2 must be delayed until week 3 because of a capacity shortage, there would be a planned order release in week 1.C) If the safety stock level were 25 units instead of 0 units, there would be a planned order release in week 2.D) If the gross requirements for week 8 were 100 units instead of 60 units, the projected on-hand inventory for week 8 would be 0 units.Answer: CReference: Material Requirements PlanningDifficulty: HardKeywords: safety stock, planned order release, scheduled receipt, gross requirement, projected on-hand inventoryAACSB: Analytic skills



Which one of the statements concerning item LMN is TRUE?A) The scheduled receipt of 80 units in week 3 should be expedited so that it is finished in week 2.B) The planned order release quantity in week 3 is 80 units.C) The planned receipt quantity in week 6 is 30 units.D) The projected on-hand inventory in week 8 is 70 units.Answer: AReference: Material Requirements PlanningDifficulty: HardKeywords: scheduled receipt, planned order release, projected on-hand inventoryLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


Table 16.6

75) Use the information from Table 16.6. If an FOQ of 80 units is used, how many planned order releases are there for item XYZ?A) zero or oneB) twoC) threeD) more than threeAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: fixed order quantity, FOQ, planned order releaseLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

76) Use the information from Table 16.6. If an FOQ of 100 units is used, how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged, because it has already been released and is being worked on.)A) zero or oneB) twoC) threeD) more than threeAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: fixed order quantity, FOQ, planned order release, scheduled receiptLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


77) Use the information from Table 16.6. If an L4L lot-sizing rule is used, how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged, because it has already been released and is being worked on.)A) zero or oneB) twoC) threeD) more than threeAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: L4L lot-sizing rule, L4L, planned order release, scheduled receiptLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

78) Use the information from Table 16.6. If a POQ lot-sizing rule is used, where P = 3, how many planned order releases are there for item XYZ? (Hint: The 80-unit scheduled receipt should remain unchanged, because it has already been released and is being worked on.)A) zero or oneB) twoC) threeD) more than threeAnswer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: periodic order quantity, POQ, planned order release, scheduled receiptLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

79) Use the information from Table 16.6. Which lot-sizing rule results in the highest projected on-hand inventory averaged over weeks 1 through week 10?A) FOQ = 100B) FOQ = 75C) L4LD) POQ, P = 3Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: POQ, FOQ, L4L, lot sizingLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


80) Management wishes to use a POQ lot-sizing rule for an item that experiences an average demand of 30 units per week. If the desired average lot size is 120 units, what should P be?A) zero or one weeksB) two or three weeksC) four or five weeksD) more than five weeksAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: lot sizing, POQLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

81) Management wishes to use an FOQ lot-sizing rule for an item based on the economic order quantity. If the annual demand is 1,200 units, the holding cost is $10 per unit per year, and the setup cost is $50 per lot, which one of the following fixed-order quantities is most appropriate?A) 90 unitsB) 110 unitsC) 130 unitsD) 150 unitsAnswer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: lot sizing, FOQLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

Case Study 16.1Sunshine Manufacturing produces three products: X, Y, Z. The production of these end items is controlled by an MRP system. Each end item X is assembled with two components of A and one component of B. Each end item of Y is assembled with two components of C and one component of A. End item Z is assembled from one unit of D and one unit of C; D is manufactured from one unit of A; and C is manufactured from one unit of B.

82) Use the information in Case Study 16.1. Which of the following sequences is an acceptable way to process the inventory records for components A, B, C, and D?A) A B C DB) D A B CC) B A D CD) C B D AAnswer: DReference: Material Requirements PlanningDifficulty: HardKeywords: order processingLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


83) Use the information in Case Study 16.1. If item C has a manufacturing lead time of two weeks, and a planned receipt of 65 units is needed in week 4, which of the following statements is TRUE?A) The planned order release in week 2 for item C is 130 units.B) The gross requirements for item B in week 4 is 65 units.C) The gross requirements for item B in week 2 is 130 units.D) The gross requirements for item B in week 2 is 65 units.Answer: DReference: Material Requirements PlanningDifficulty: HardKeywords: gross requirementsLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

Table 16.7Viola Products produces one item with the following bill of materials

A recent check of their inventory reveals the following quantities on hand.

Item Quantity Item Quantity Item QuantityA 7 D 3 G 22B 6 E 4 H 15C 3 F 5 J 11

Currently no scheduled receipts exist for any of the dependent demand items.

84) Use Table 16.7 to answer this question. How many additional units of D are needed to produce 20 end items?A) fewer than 75B) more than 75 but fewer than 95C) more than 95 but fewer than 115D) more than 115Answer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

85) Use Table 16.7 to answer this question. How many additional units of J are needed to produce 20 end items?A) fewer than 175B) more than 175 but fewer than 205


C) more than 205 but fewer than 245D) more than 245Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

86) Use Table 16.7 to answer this question. How many additional units of H are needed to produce 20 end items?A) fewer than 250B) more than 250 but fewer than 350C) more than 350 but fewer than 450D) more than 450Answer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

87) Use Table 16.7 to answer this question. How many additional units of G are needed to produce 20 end items?A) fewer than 50B) more than 50 but fewer than 60C) more than 60 but fewer than 70D) more than 70Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


88) Use Table 16.7 to answer this question. How many additional units of G are needed to produce seven end items?A) 0B) 11C) 22D) 33Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

89) Use Table 16.7 to answer this question. How many additional units of H are needed to produce seven end items?A) 130B) 145C) 160D) 175Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

90) Use Table 16.7 to answer this question. How many additional units of J are needed to produce seven end items?A) 25B) 36C) 47D) 58Answer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


91) Use Table 16.7 to answer this question. How many additional units of D are needed to produce seven end items?A) 33B) 30C) 27D) 24Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

Figure 16.8

Item Amount Item Amount Item AmountO 7 F 11 D 2P 12 U 7 E 8C 3 N 12

Inventory amounts indicated in the table are available to produce the end item indicated in this bill of materials.

92) Use Figure 16.8 to answer this question. How many additional units of E are needed to produce ten end items?A) 284B) 142C) 71D) 35Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


93) Use Figure 16.8 to answer this question. How many additional units of D are needed to produce seven end items?A) 40B) 46C) 68D) 54Answer: DReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

94) Use Figure 16.8 to answer this question. How many additional units of P are needed to produce ten end items?A) 46B) 38C) 27D) 13Answer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

95) Use Figure 16.8 to answer this question. How many additional units of F are needed to produce twelve end items?A) 236B) 214C) 182D) 176Answer: BReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


96) Use Figure 16.8 to answer this question. How many additional units of N are needed to produce eighteen end items?A) 82B) 96C) 70D) 74Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: bill of materials, BOMLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

97) Which of the following is NOT used to derive an item's gross requirements?A) the MPS for immediate parents that are end itemsB) the planned order releases for immediate parents below the MPS levelC) the MPS components that are not purchased itemsD) any other requirements not originating in the MPS, such as the demand for replacement partsAnswer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: gross requirements, MRP explosionLearning Outcome: Apply the process of materials requirements planning (MRP)

98) A computer-generated memo used by inventory planners to make decisions about releasing new orders and adjusting due dates of scheduled receipts is a(n):A) enterprise report.B) infinite capacity.C) action notice.D) input—output report.Answer: CReference: Material Requirements PlanningDifficulty: ModerateKeywords: planned order release, scheduled receipt, action notice

99) A technique used for projecting time-phased capacity requirements for workstations is called:A) capacity requirements planning.B) time-adjusted output control.C) input—output control.D) work center planning.Answer: AReference: Material Requirements PlanningDifficulty: ModerateKeywords: capacity requirements planning


100) Which of the following uses of MRP in promoting a healthy environment is NOT used?A) An MRP system can track waste in a bill of materials as a component of an item.B) When the master production schedule is developed for a product, reports can be generated that project the quantity of waste.C) When the master production schedule is developed for a product, reports can be generated that project the timing of waste.D) The MRP system can be used to communicate directly with the International Organization for Standardization to file ISO 9000 documentation.Answer: DReference: Material Requirements PlanningDifficulty: EasyKeywords: MRP, environmentLearning Outcome: Apply the process of materials requirements planning (MRP)

101) Which of the following statements about service resource planning is TRUE?A) The service analogy to the BOM in a manufacturing company is a bill of lading (BOL).B) One resource that every service provider manages is cash.C) There is no such thing as dependent demand in the service sector.D) As services are completed, the accounts receivable decrease.Answer: BReference: Resource Planning for Service ProvidersDifficulty: ModerateKeywords: service, resource planning

102) An example of a dependent demand item for services is a(n):A) menu in a restaurant.B) jukebox in a club.C) operating suite at a hospital.D) a pilot's checklist for an airline.Answer: CReference: Resource Planning for Service ProvidersDifficulty: ModerateKeywords: dependent demand, service

103) Facilitating goods in a hotel's bill of resources would include a:A) housekeeper.B) fax machine.C) towel.D) front-desk clerk.Answer: CReference: Resource Planning for Service ProvidersDifficulty: ModerateKeywords: facilitating goods, BOR, bill of resources


104) The service analogy to the bill of materials in a manufacturing company is the bill of:A) resources.B) services.C) sub-services.D) tender.Answer: AReference: Resource Planning for Service ProvidersDifficulty: ModerateKeywords: BOR, bill of resources

105) A companywide process that cuts across functional areas, business units, geographic regions, and product lines is a(n) ________.Answer: enterprise processReference: Enterprise Resource PlanningDifficulty: ModerateKeywords: enterprise process, ERPLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

106) ERP revolves around a(n) ________.Answer: single databaseReference: Enterprise Resource PlanningDifficulty: ModerateKeywords: enterprise resource planning, ERP, databaseLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

107) In MRP, a(n) ________ is any item manufactured from one or more components.Answer: parentReference: Material Requirements PlanningDifficulty: ModerateKeywords: parent, component

108) In MRP, a(n) ________ is an item that may go through one or more operations to be transformed into or become part of one or more parents.Answer: componentReference: Material Requirements PlanningDifficulty: ModerateKeywords: component, parent

109) ________ is a computerized information system developed specifically to aid in managing dependent-demand inventory and scheduling replenishment orders.Answer: MRP, material requirements planningReference: Material Requirements PlanningDifficulty: EasyKeywords: MRP, material requirements plan, dependent demand


110) MRP ________ is a process that converts the requirements of various final products into a material requirements plan that specifies the replenishment schedule of all the subassemblies, components, and raw materials needed by the final products.Answer: explosionReference: Material Requirements PlanningDifficulty: ModerateKeywords: explosion, MRP, material requirements planLearning Outcome: Apply the process of materials requirements planning (MRP)

111) The ________ is a record of all components of an item, the parent-component relationships, and usage quantities derived from engineering and process design.Answer: bill of materials, BOMReference: Material Requirements PlanningDifficulty: ModerateKeywords: BOM, bill of materials

112) A(n ) ________ item has one or more parents but no components.Answer: purchasedReference: Material Requirements PlanningDifficulty: ModerateKeywords: purchased item, parent, component

113) The L4L rule is a special case of the ________ .Answer: POQ ruleReference: Material Requirements PlanningDifficulty: ModerateKeywords: POQ

114) Among the four core processes of an organization that link activities within and across firms in a supply chain, the ________ interacts with all of them either through its inputs or outputs.Answer: MRP systemReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP system, material requirements planning

115) A(n) ________ is an intermediate item that is assembled from one or more components.Answer: subassemblyReference: Material Requirements PlanningDifficulty: ModerateKeywords: subassembly, intermediate item, component

116) ________ is the degree to which a component has more than one immediate parent.Answer: Part commonalityReference: Material Requirements PlanningDifficulty: ModerateKeywords: part commonality, component, parent


117) The sums of the quantities in the master production schedule must equal those in the ________.Answer: sales and operations planReference: Material Requirements PlanningDifficulty: ModerateKeywords: master production schedule, MPS, material requirements planning, MRP

118) A(n) ________ is a record that divides the future into time periods called time buckets.Answer: inventory recordReference: Material Requirements PlanningDifficulty: ModerateKeywords: inventory record, time bucket

119) One thing that an MRP II system has that an MRP system does not is ________.Answer: a linkage to the financial systemReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP II

120) ________ are the total demand derived from all parent production plans.Answer: Gross requirementsReference: Material Requirements PlanningDifficulty: ModerateKeywords: gross requirements, parent

121) ________ are orders that have been placed but not yet completed.Answer: Scheduled receiptsReference: Material Requirements PlanningDifficulty: ModerateKeywords: scheduled receipts, order

122) Operations produces a number of items in one production period. Those items that are not produced for a specific customer order are ________.Answer: available to promiseReference: Material Requirements PlanningDifficulty: ModerateKeywords: available to promise, ATP

123) ________ is an estimate of the amount of inventory available each week after gross requirements have been satisfied.Answer: Projected on-hand inventoryReference: Material Requirements PlanningDifficulty: ModerateKeywords: projected on-hand inventory


124) Waiting time and process time are two components of ________.Answer: lead timeReference: Material Requirements PlanningDifficulty: ModerateKeywords: waiting time, processing time, lead time

125) ________ is a lot-sizing rule under which the lot size ordered covers the gross requirements of a single week.Answer: Lot-for-lot, L4LReference: Material Requirements PlanningDifficulty: ModerateKeywords: L4L, lot-for-lot sizing rule

126) A(n) ________ is inventory carried into a week but too small to prevent a shortage.Answer: remnantReference: Material Requirements PlanningDifficulty: ModerateKeywords: remnant, inventory

127) The lot-for-lot (L4L) rule minimizes inventory investment but it also maximizes the number of ________.Answer: orders, orders placedReference: Material Requirements PlanningDifficulty: ModerateKeywords: lot-for-lot rule, L4L

128) ________ is a technique used for projecting time-phased capacity requirements for workstations.Answer: Capacity requirements planning, CRPReference: Material Requirements PlanningDifficulty: ModerateKeywords: CRP, capacity requirements planning

129) ________ ties the basic MRP system to the company's financial system.Answer: Manufacturing resource planning, MRP IIReference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements plan, MRP II, manufacturing resource planning

130) A(n) ________ is a record of a service firm's parent-component relationships all of the materials, equipment, time, staff, and other productive assets associated with them, including usage quantities.Answer: bill of resourcesReference: Resource Planning for Service ProvidersDifficulty: ModerateKeywords: resource planning, service, bill of resources


131) What are the differences and similarities among material requirements planning, manufacturing resource planning, and enterprise resource planning systems?Answer: The materials requirement planning (MRP) system can be considered a subset of the manufacturing resource planning (MRP II) system, containing all of the production-related capabilities without the tie-in to the company's financial and other core and supporting process systems. The MRP II system could be considered a subset of an enterprise resource planning (ERP) system, containing everything an ERP system has without the single source of data, streamlined data flows, and availability of a wealth of real-time information for all employees.Reference: Multiple SectionsDifficulty: ModerateKeywords: MRP, material requirements planningLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

132) What is the basic idea behind an enterprise resource planning system?Answer: An enterprise resource planning system is a large, integrated information system that supports many, if not all, of a firm's processes and data storage needs. The organization can view its operations as a whole rather than guessing how activity in one area affects another. The common database eliminates multiple data entry and the mistakes that are inherent in multiple entry systems.Reference: Enterprise Resource PlanningDifficulty: ModerateKeywords: MRP, material requirements planningLearning Outcome: Describe the process and applications of enterprise resource planning (ERP)

133) What are the key inputs to an MRP system?Answer: The key inputs are the bill of materials, master production schedule, and inventory records.Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements plan, input

134) What is the explosion of the MPS and what are the outputs?Answer: MRP translates, or explodes, the MPS and other sources of demand into the requirements needed for all of the subassemblies, components, and raw materials the firm needs to produce parent items. This process generates the material requirements plan for each component item. An item's gross requirements are derived from three sources: 1. The MPS for immediate parents that are end items; 2. The planned order releases (not the gross requirements, scheduled receipts, or planned receipts) for immediate parents below the MPS level; 3. Any other requirements not originating in the MPS, such as the demand for replacement parts.Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements plan, input, MPS, explode


135) Explain the difference between independent and dependent demand and illustrate your explanation with an example.Answer: Examples will vary. The key difference between the two is whether the demand for items A is driven directly by the demand for item B. End items are typically independent demand since their demand is subject only to customers' appetite for them. The components used to make up the end item have their demand determined by the number of end items that are required during any production period.Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements plan, input

136) What information can be gleaned from a bill of materials? If you were asked to produce an item based solely on a copy of its BOM, what missing information would you need?Answer: A bill of materials is a record of all the components of an item, the parent component relationships, and the usage quantities derived from engineering and process designs. You would have a parts list, but would have no idea how long it might take to assemble an item, or receive the components from a supplier (lead times). You would also need to know what the levels of inventory were for each item listed in the BOM. Since the question is phrased as "produce an item" you might assume that only one end item was required, but if the interpretation is otherwise, you would need to know a production quantity.Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements plan, input

137) Explain the key differences between the FOQ, POQ, and L4L lot-sizing rules.Answer: A fixed-order-quantity (FOQ) rule maintains the same order quantity each time an order is issued but varies the time interval between orders. A periodic-order-quantity (POQ) rule allows a different order quantity to be specified but each order covers the requirements for a fixed number of time periods. A lot-for-lot (L4L) rule covers the gross requirements of a single week's production. POQ and L4L rules strive to avoid remnants and thus have smaller average inventory than FOQ. Because their average inventory is lower, they are less able to respond to last-minute changes in customer requests.Reference: Material Requirements PlanningDifficulty: ModerateKeywords: FOQ, POQ, L4L lot-sizing rulesLearning Outcome: Apply the process of materials requirements planning (MRP)

138) Explain why, in a dependent demand environment, MRP does a better job of estimating the need to replenish inventory items than does the reorder point system.Answer: MRP works better for dependent-demand environments because statistical forecasting for components with lumpy demand results in large forecast errors. It also provides managers with information useful for planning capacities and estimating financial requirements, and it automatically updates the demand and inventory-replenishment schedules of components when the production schedule of parent items changes.Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, lumpy demand


139) How can an MRP system be used in a firm's sustainability efforts?Answer: Companies can modify their MRP systems to help them track their wastes and plan for their disposal. The type and amount of waste associated with each item can be entered into its BOM by treating the waste much like you would a component of the item. When the MPS is developed for a product, reports can be generated that project the amount of waste expected during the production process and when it will occur. Although this approach can require that a firm's BOM be modified substantially, the benefits are also substantial. Firms can identify their waste problems in advance to eliminate them in some cases (through process improvement efforts) or plan for their proper disposal in others. It also gives the firm a way to generate any formal documentation required by the government to verify that it has complied with environmental laws and policies.Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, lumpy demand

140) Can MRP be adapted for use in services and, if so, how would it work?Answer: Service providers must also plan the use of resources and facilitating goods. A bill of resources (BOR) is a record of all the required materials, equipment, time, staff, and other resources needed to provide a service, the parent—component relationships, and the usage quantities. Naturally, the services themselves cannot be inventoried but must instead be supplied on demand.Reference: Resource Planning for Service ProvidersDifficulty: ModerateKeywords: BOR, bill of resources, facilitating goodsLearning Outcome: Apply the process of materials requirements planning (MRP)


141) Complete the following MPS Record

Answer:

Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS, master production scheduleAACSB: Analytic skills


142) Complete the following MPS Record.

Answer:

Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MPS, master production scheduleAACSB: Analytic skills


143) Complete the following MRP record using the POQ rule.

Answer:

Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP record. POQ, periodic order quantityLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


144) Complete the following MRP record using the L4L rule:

Answer:

Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP record, L4L, lot-for-lot ruleLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


145) Complete the following MRP record using the FOQ rule:

Answer:

Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP record, FOQ, fixed order quantityLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


146) Complete the following MRP record using the FOQ rule:

Answer:

Reference: Material Requirements PlanningDifficulty: ModerateKeywords: MRP, material requirements planning, FOQ, fixed order quantityLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


147) Use the bill of materials and inventory records to determine the quantity of purchased items necessary to assemble 20 end items if the manufacturer uses lot-for-lot ordering. There are no end items currently on hand, and none of the components have any scheduled receipts.

Component On-hand Component On-handA 5 D 15B 75 E 3C 10 F 20

Answer: 20 End Items → 40 As less 5 on hand → 35 As35 As → 70 Bs35 As → 70 Ds less 15 Ds on hand → 55 Ds

20 End Items → 40 Cs less 10 on hand → 30 Cs30 Cs → 30 Es less 3 on hand → 27 Es30 Cs → 60 Fs less 20 on hand → 40 Fs30 Cs → 90 Bs

90 Bs + 70 Bs →160 Bs less 75 on hand → 85 Bs

Purchased Item Qty to OrderB 85D 55E 27F 40

Reference: Material Requirements PlanningDifficulty: ModerateKeywords: BOM, inventory record, bill of materialsLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills


148) Use the bill of materials and inventory records to determine the additional quantities of purchased items necessary to assemble 15 end items if the manufacturer uses lot-for-lot ordering. There are no end items currently on hand, and none of the components have any scheduled receipts.


Inventory amounts indicated in the table are available to produce the end item indicated in this bill of materials.Answer: Purchased

ItemQuantity to

OrderD 150E 464F 274N 64P 57



149) Use the bill of materials and inventory records to determine the additional quantities of purchased items necessary to assemble 20 end items if the manufacturer uses lot-for-lot ordering. There are no end items currently on hand, and none of the components have any scheduled receipts.


Inventory amounts indicated in the table are available to produce the end item indicated in this bill of materials.Answer: Purchased

ItemQuantity to

OrderD 216E 618F 142N 104P 91



150) Consider the MPS, BOM, and inventory data shown.

Master Production Schedule:The following table shows the MPS start quantities for the next 10 weeks.

Finished Item A 1 2 3 4 5 6 7 8 9 10

Finished Item A MPS Start 20 40 30 20 40

Bill of Material:- Item A uses 2 each of component D, 1 each of component C and 2 each of subassembly B.- Subassembly B uses 2 each of component E.

Selected Inventory Data:

Item Lot Sizing Rule Lead TimeScheduled Receipts On-Hand

B L4L 1 40 in period 1C POQ = 3 2 40D FOQ = 250 1 100E L4L 2 160 in period 2

Construct the MRP schedule using the preceding information. Blank MRP records are provided at the end of this test.


Answer:

Reference: Output from Material Requirements Planning


Difficulty: HardKeywords: MRP, material requirements planning, lot-for-lot, L4L, fixed order quantity, FOQ, periodic order quantity, POQLearning Outcome: Apply the process of materials requirements planning (MRP)AACSB: Analytic skills

Blank MRP Record

Item

Description

Lot Size

Lead Time:

Date 1 2 3 4 5 6 7 8 9 10

Gross

requirements

Scheduled

receipts

Projected on Hand

Planned

receipts

Planned order

releases


Documents

Chapter 18